Governor Andrew M. Cuomo today announced that he has signed a bill to enhance small businesses' access to capital and credit in New York State. The bill authorizes the use of federal funds for three New York State small business programs: the Innovate NY Fund, the New York State Capital Access Program, and the Bonding Guarantee Assistance Program. New York will receive up to $55.4 million through this initiative. These funds are expected to leverage at least $800 million in private investment and create thousands of jobs.
"Small business innovation is key to creating a more efficient and effective economy that works for all New Yorkers," Governor Cuomo said. "These programs will help increase access to critical capital and credit for a wide range of small businesses, giving them the tools they need to kick-start the economy across our state. With these programs, we are also making it easier for minority- and women-owned business enterprises to secure bonding for state contracting and we are creating a supportive environment for small businesses throughout in New York."
The bill authorizes the use of federal funds that are available through the U.S. Department of the Treasury's State Small Business Credit Initiative for three economic development programs:
- The bill establishes the Innovate NY Fund, a new seed-stage equity fund to support innovation, job creation, and high growth entrepreneurship throughout the state; the bill provides approximately $25 million for this program
- The bill amends New York's Capital Access Program, which provides matching funds to loan loss reserve pools at financial institutions as an incentive to increase small business lending; the bill expands the range of New York-based financial institutions that can participate in the program, which had been active only as a pilot program from 2002-05; the bill provides approximately $18 million for this program
- The bill activates New York's Bonding Guarantee Assistance Program, which provides credit to help small and minority- and women-owned businesses secure bonding; the bill provides approximately $10 million for this program
New York is eligible to receive approximately $55.4 million in federal funds for these programs. The exact award that the state will receive is expected to be announced this summer.
Empire State Development President, CEO & Commissioner Kenneth Adams said, "Vibrant small businesses are the backbone of a strong economy, and thanks to Governor Cuomo and the Innovative NY Fund, they are getting stronger. With the introduction of the Innovate NY Fund, we will better support our new high growth firms by making critically needed 'seed-stage' capital available to small businesses that have the potential to grow rapidly and create jobs. These programs will provide small businesses with greater access to additional credit from traditional and alternative financial institutions, rebuilding our economy from the ground up."
New York State Senator James S. Alesi, Chairman of the Senate Committee on Commerce, Economic Development & Small Business and lead sponsor of the bill in the Senate, said, "I commend Governor Cuomo for making his top priorities this session revitalizing New York's economy and putting people back to work. Today's legislation is a step in the right direction, providing New York's hundreds of small businesses access to more than $50 million in federal funds, and empowering emerging businesses through the Innovate NY Fund. Ultimately, these vital funds will further our efforts to revitalize our struggling economy and create new jobs, and no one could argue that New York doesn't need new jobs right now."
New York State Assemblyman Robin Schimminger, Chairman of the Assembly Committee on Economic Development, Job Creation, Commerce & Industry and lead sponsor of the bill in the Assembly, said, "I am very pleased that Governor Cuomo signed this legislation into law. The Innovate NY Fund will do exactly what New York State is in desperate need of creating and retaining jobs in homegrown high-tech companies by investing approximately $25 million in seed-stage funding to New York State businesses. Up until now, government-sponsored research helped support the invention of numerous ideas and products that could benefit society, but fell short of advancing products beyond the inception stage. The creation of this new fund will increase the State's ability to assist businesses that are launching new inventions by granting funds for products to get out of the inception stage and into the marketplace."
About the State Small Business Credit Initiative
President Obama signed into law the Small Business Jobs Act of 2010 on September 27, 2010 to help increase credit availability for small businesses. The Act included the State Small Business Credit Initiative, a $1.5 billion program administered by the U.S. Department of the Treasury intended to provide direct support to states for use in programs designed to increase small businesses' access to credit.
About Empire State Development
Empire State Development is New York's chief economic development agency and administrator of the statewide business resource portal New York First (www.NYfirst.NY.gov). The mission of Empire State Development is to promote business investment and growth that leads to job creation and prosperous communities across New York State. ESD also oversees the marketing of "I LOVE NY," the State's iconic tourism brand. For more information on Empire State Development, visit www.esd.ny.gov.